Principal Agent Problem | Definition Minute | Behavioral Economics in Marketing Podcast

Principal Agent Problem | The principal–agent problem, is an economic term that describes when one person or entity (the "agent"), is able to make decisions and/or take actions on behalf of, or that impact, another person or entity: the "principal". This dilemma exists in circumstances where agents are motivated to act in their own best interests, which are contrary to those of their principals, and is an example of moral hazard. This moral hazard is often combined with the existence of asymmetric information.

 

📎 Definition Minute is a new subset of the Behavioral Economics in Marketing podcast. In these mini-episodes, I will define economic theories, in a minute or two. The topics will be review, introductory or discrete in nature. 

 

Behavioral Economics in Marketing Podcast | Understanding how we as humans make decisions is an important part of marketing. Behavioral economics is the study of decision-making and can give keen insight into buyer behavior and help to shape your marketing mix. Marketers can tap into Behavioral Economics to create environments that nudge people towards their products and services, to conduct better market research and analyze their marketing mix.

Sandra Thomas-Comenole | Host | Marketing professional with over 15 years of experience leading marketing and sales teams and a rigorously quantitative Master’s degree in economics from Rensselaer Polytechnic Institute. Check out her Linkedin profile here: Sandra Thomas-Comenole, Head of Marketing, Travel & Tourism